Acadia Marble, Tile & Terrazzo Ltd. v. Oromocto Property Developments Ltd., (1998) 205 N.B.R.(2d) 358 (CA)

• Judge: Ayles, Turnbull and Drapeau, JJ.A.
• Court: Court of Appeal (New Brunswick)
• Case Date: September 29, 1998
• Jurisdiction: New Brunswick
• Citations: (1998), 205 N.B.R.(2d) 358 (CA);1998 CanLII 12226 (NB CA);205 NBR (2d) 358;[1998] NBJ No 412 (QL)

Acadia Marble v. Oromocto Prop. (1998), 205 N.B.R.(2d) 358 (CA);

    205 R.N.-B.(2e) 358; 523 A.P.R. 358

MLB headnote and full text

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Temp. Cite: [1998] N.B.R.(2d) TBEd. NO.004

Oromocto Property Developments Ltd., a body corporate (defendant/appellant) v. Acadia Marble, Tile & Terrazzo Ltd., a body corporate (plaintiff/respondent)

(43/98/CA)

Indexed As: Acadia Marble, Tile & Terrazzo Ltd. v. Oromocto Property Developments Ltd.

New Brunswick Court of Appeal

Ayles, Turnbull and Drapeau, JJ.A.

October 28, 1998.

Summary:

A contractor sued for the balance owing to it under a contract to replace floor tiles. The owner denied liability on the ground that the extras claimed by the contractor had not been agreed to in writing, there had not been "satisfactory completion" within the meaning of the contract and the work had not been completed in a good and satisfactory man­ner. The owner claimed set-off for the costs of making necessary repairs and counter­claimed for the return of monies paid and an amount for the cost of replacing the floor.

The New Brunswick Court of Queen's Bench, Trial Division, in a decision reported [1998] N.B.R.(2d) Uned. 8, allowed the contractor's action and dismissed the coun­terclaim. The court awarded interest pursuant to s. 45(1) of the Judicature Act instead of the higher contractual rate. The court denied the contractor costs on the dismissal of the counterclaim. The defendant appealed. The contractor cross-appealed the refusal to award contract interest and costs on the dismissal of the counterclaim.

The New Brunswick Court of Appeal allowed the cross-appeal and ordered the owner to pay interest at the contractual rate, costs as set by the trial judge and costs on the counterclaim at trial. The court dismissed the owner's appeal and ordered the owner to pay costs on appeal with respect to the main action and the counterclaim.

Building Contracts - Topic 2664

Payment - Compensation to builder - Progress and final payments - Obligation of owner - Conditions precedent - A con­tract provided for payment of 85% of the contract price on "satisfactory comple­tion" and the 15% balance thereafter - Amend­ments were to be by separate con­tract or in writing - The contractor agreed to correct deficiencies, but insisted on payment - The owner advised the contrac­tor by letter that it was keeping a "defi­ciency holdback" that would only be released "upon completion of deficiencies to our satisfaction" - The 15% holdback would be released thereafter on receipt of a sworn statement - The contractor sued for the holdbacks - The owner asserted that the action was prema­ture because the letter's conditions were not satisfied - The New Brunswick Court of Appeal affirmed that the action was not premature - The contractor had not agreed to the conditions in accordance with the contract's procedure - The contractor agreed to the conditions, because it had no other way of getting payment - See para­graphs 20 to 22.

Building Contracts - Topic 2668

Payment - Compensation to builder - Progress and final payments - Obligations of owner - Breach by owner - Withhold­ing payment because of deficiencies - [See Building Contracts - Topic 2664 ].

Building Contracts - Topic 2668

Payment - Compensation to builder - Progress and final payments - Obligations of owner - Breach by owner - Withhold­ing payment because of deficiencies - A con­tract provided that the owner would pay 85% of the contract price on "satis­factory completion" of the work and the 15% balance thereafter - The owner claimed that there were deficiencies which had to be corrected before payment - The con­tractor agreed to correct the deficiencies, but insisted on payment - The owner made payment keeping the 15% holdback and a deficiency holdback - Thereafter, the owner refused to pay, asserting that the work was not satisfactor­ily completed - The contractor obtained judgment against the owner - The owner appealed, assert­ing that the trial judge erred in equating "satis­factory completion" with "substantial com­pletion" - The New Brunswick Court of Appeal held that the trial judge correct­ly interpreted "satisfac­tory completion" to mean completion of the work to a reason­able level of quality - See paragraphs 12, 13.

Building Contracts - Topic 2828

Payment - Compensation to builder - Interest - Interest as damages - A con­trac­tor obtained judgment for breach of a contract to remove existing tile and supply and install new tile - The trial judge exer­cised her discretion to award the contractor prejudgment interest pursuant to s. 45(1) of the Judicature Act, instead of the higher rate provided for in the contract - The New Brunswick Court of Appeal held that the trial judge made an error in law in failing to give effect to the contract - The discre­tion as to interest conferred by s. 45(1) was exercisable only where there was no enforceable agreement between the parties - See paragraphs 23 to 26.

Contracts - Topic 2517

Variation or alteration - By parties - What conduct constitutes a variation - [See Building Contracts - Topic 2664 ].

Contracts - Topic 4106

Remedies for breach - Specific perform­ance - When available - General - A con­tractor sued for the balance owing to it under a contract to replace floor tiles - The owner asserted that there were defi­ciencies and counterclaimed for, inter alia, specific performance, but subsequently withdrew the claim - In allowing the ac­tion, the trial judge granted the contrac­tor time to remedy the defects - The New Brunswick Court of Appeal held that the trial judge overlooked the fact that there was no longer a claim for specific per­formance - In any event, specific per­for­mance was an equitable remedy and should not have been granted where dam­ages would have been adequate - Courts were "allergic" to exceptions to this rule, at least where it sought to compel per­formance of a repair contract which had been less than perfectly executed - See paragraphs 27 to 30.

Damages - Topic 8008

Contracts - Contracts for personal services - Damages in lieu of specific performance - [See Contracts - Topic 4106 ].

Interest - Topic 3403

Statutory interest - General - Application of - [See Building Contracts - Topic 2828 ].

Interest - Topic 5105

Interest as damages (prejudgment interest) - Breach of contract - Contracts for work and materials - [See Building Contracts - Topic 2828 ].

Interest - Topic 5303

Interest as damages (prejudgment interest) - Interest on payment of money or debt withheld - Amount due under a contract - [See Building Contracts - Topic 2828 ].

Interest - Topic 5308

Interest as damages (prejudgment interest) - Interest on payment of money or debt withheld - Rate of interest applicable - [See Building Contracts - Topic 2828 ].

Practice - Topic 8301

Appeals - Appeals from order for costs - Variation of order of trial court - A trial judge dismissed a counterclaim without awarding costs - The plaintiff appealed, seeking costs - The defendants asserted that the court should not intervene, since costs were within the trial judge's discre­tionary power - The New Brunswick Court of Appeal stated that where a trial judge had exercised his or her discretion as to costs, it would only intervene if satisfied that the exercise of discretion was mani­festly wrong - However, the trial judge's decision was silent on the issue of costs and there was no indication that she had applied her mind to the question - Ac­cordingly, it could not be said that the court was interfering with the exercise of a discretionary power since no power had been exercised - The court awarded the plaintiff costs on the counterclaim - See paragraphs 32 to 36.

Specific Performance - Topic 304

Bars - General - Personal service contract -[See Contracts - Topic 4106 ].

Specific Performance - Topic 506

When available - General principles - Contractual obligations - [See Contracts - Topic 4106 ].

Specific Performance - Topic 603

When available - Contracts for building or repair - Repair - General - [See Con­tracts - Topic 4106 ].

Cases Noticed:

Inch v. Farmers' Co-operative Dairy Co., [1941] 2 D.L.R. 27 (N.B.C.A.), refd to. [para. 13].

Lensen v. Lensen, [1987] 2 S.C.R. 672; 79 N.R. 334; 64 Sask.R. 6; [1988] 1 W.W.R. 4812, refd to. [para. 19].

Modern Construction Ltd. v. Moncton (City) (1972), 4 N.B.R.(2d) 666 (C.A.), dist. [para. 21].

111246 Construction Ltd. v. Strathmore Investments Ltd., [1988] A.J. No. 24, refd to. [para. 26].

Munroe (C.A.) Ltd. v. Bower, [1991] N.B.J. No. 506, refd to. [para. 26].

Sabattis et al. v. Oromocto Indian Band and Sacobie et al. (1986), 76 N.B.R.(2d) 227; 192 A.P.R. 227 (C.A.), refd to. [para. 33].

Williams et al. v. Saint John (City), New Brunswick and Chubb Industries Ltd. (1985), 66 N.B.R.(2d) 10; 169 A.P.R. 10 (C.A.), refd to. [para. 34].

Distributeur Norbec Enrg. and Gagnon v. Daigle (Clarence ) & Fils Ltée (1984), 57 N.B.R.(2d) 269; 148 A.P.R. 269 (C.A.), refd to. [para. 35].

Authors and Works Noticed:

Berryman, Jeffrey, The Specific Perform­ance Damages Continuum: An Historical Perspective (1985), 17 Ottawa L.R. 295, generally [para. 28].

Counsel:

Eugene J. Mockler, Q.C., for the appellant;

J. William Cabel, for the respondent.

This case was heard on September 29, 1998, by Ayles, Turnbull and Drapeau, JJ.A., of the New Brunswick Court of Ap­peal. Drapeau, J.A., delivered the follow­ing judg­ment for the Court of Appeal on Oc­tober 28, 1998.